Not every investment is worthwhile.
That’s the lesson Synchrony Financial learned following the downturn of its loans in Q1 2017. The supply for these loan losses rose 21 percent to $1.3 billion.
While shares for the lender took a nosedive of 16 percent, it has seen an overall 23 percent fall this year. Synchrony is expecting its write-off rate for 2017 to be 5 percent or higher compared with the 4.75 to 5 percent forecasted amount.
Keefe Bruyette & Woods analyst, Sanjay Sakhrani, commented on this Q1 loss: “The miss this quarter was primarily on higher provisions and worse credit quality than expected. Synchrony adds to the list of card issuers posting weaker provisions, but this coverage increase seems to be more outpaced relative to the rest.”